In an environment characterized by stock competition within the industry, pressure on net interest margins, and increasingly stringent risk control, achieving a synergistic balance among scale, efficiency, quality, governance, and returns is a challenge that Bank Of Zhengzhou Co.,Ltd. must confront directly. Moving from a superficial recovery on the books to a high-quality rebound represents the real test for the bank, which has only just begun.
Recently, Bank Of Zhengzhou Co.,Ltd. released its annual report for 2025. As the first regional city commercial bank listed on both the A-share and H-share markets in China, the bank led its peers in deposit growth for the year, saw asset quality improve for the third consecutive year, and achieved a slight recovery in net profit. Against a backdrop of narrowing industry net interest margins, regional economic pressures, and intensified market competition, Bank Of Zhengzhou Co.,Ltd. recorded its highest asset growth rate since 2018, maintaining its fundamental operations and demonstrating a degree of operational resilience.
However, this annual report also revealed numerous problems and challenges facing the bank.
Superficial Stability is Evident In 2025, the most notable achievements for Bank Of Zhengzhou Co.,Ltd. were concentrated in three dimensions: scale expansion, liability optimization, and risk mitigation.
As of the end of 2025, the bank's total assets reached 743.674 billion yuan, a year-on-year increase of 9.95%. It surpassed the 700 billion yuan mark in the first quarter and maintained a steady expansion trend throughout the year. Credit allocation maintained reasonable growth, with total loans reaching 410.264 billion yuan, up 5.82% year-on-year. Resources were primarily directed towards the real economy, small and micro enterprises, and public consumption sectors, aligning with its role as a local corporate bank.
Performance on the liability side was outstanding. The bank's total absorbed deposits amounted to 463.075 billion yuan, an increase of 58.537 billion yuan compared to the previous year, representing a significant growth rate of 14.47% and maintaining double-digit growth. Within this, personal deposit balances reached 271.847 billion yuan, a substantial increase of 24.60% year-on-year. The continuous growth in household deposits has significantly enhanced the stability of liabilities, providing ample and relatively cost-controllable funding sources for business operations.
In terms of profitability, Bank Of Zhengzhou Co.,Ltd. achieved annual operating revenue of 12.921 billion yuan, a slight increase of 0.34% year-on-year. Net profit was 1.909 billion yuan, up 2.44% year-on-year, while net profit attributable to the parent company's shareholders was 1.895 billion yuan, an increase of 1.03%. This ended the previous consecutive declining trend and represented restorative growth. Through refined cost control, business and management expenses decreased by 4.14% year-on-year, and the cost-to-income ratio was controlled at 27.67%, demonstrating profit resilience under pressure.
The simultaneous improvement in Bank Of Zhengzhou Co.,Ltd.'s asset quality and risk resistance capability was a highlight of the annual report. The non-performing loan ratio at year-end was 1.71%, down 0.08 percentage points from the previous year, marking a decline for three consecutive years. The provision coverage ratio increased to 185.81%, indicating a thicker risk buffer. The liquidity ratio, liquidity coverage ratio, and net stable funding ratio all significantly exceeded regulatory standards, suggesting that liquidity risk is generally controllable.
In its business layout, Bank Of Zhengzhou Co.,Ltd. closely focused on the key financial sectors, achieving rapid growth in technology loans, inclusive loans for small and micro businesses, and digital economy loans. Breakthroughs were made in multiple areas including green finance, mergers and acquisitions finance, and wealth management. The scale of retail wealth management assets increased by 11.57% year-on-year, and income from agency-based wealth management intermediary services surged by 86.11%, clearly showing the bank's transformation efforts.
Underlying Concerns Regarding Growth Quality In 2025, while Bank Of Zhengzhou Co.,Ltd.'s asset growth approached 10%, its operating revenue growth was a mere 0.34%. The core contradiction lies in the failure to translate high-speed asset expansion into effective revenue growth. In fact, the issue of weak operating revenue growth has persisted for several years. Against the industry backdrop of continuously narrowing net interest margins, this model of "chasing scale without generating profits" is unsustainable.
The limitations in Bank Of Zhengzhou Co.,Ltd.'s profit structure are even more apparent. Annual investment income reached a high of 1.923 billion yuan, becoming a significant support for profits. However, net profit after deducting non-recurring gains and losses was 1.824 billion yuan, actually decreasing by 1.86% year-on-year. This indicates that the slight growth in net profit did not stem from improved profitability in the core deposit and loan business but was primarily driven by investment income.
Over-reliance on investment income to maintain profitability is highly risky for a city commercial bank like Bank Of Zhengzhou Co.,Ltd., which positions itself on "serving the local economy, small and medium enterprises, and residents." Should market conditions adjust and investment income decline, and if the core business cannot take over, profits could face a risk of stalling.
The sharp volatility in quarterly performance is also cause for concern. In the fourth quarter of 2025, Bank Of Zhengzhou Co.,Ltd.'s operating revenue was 3.526 billion yuan, a significant year-on-year decrease of 8.08%. The net profit attributable to the parent company's shareholders showed a loss of 384 million yuan, and after non-recurring adjustments, the loss was 455 million yuan, a year-on-year decline of 25.94%. Typically, the fourth quarter is a period for banks to push for performance targets. The substantial loss suffered by Bank Of Zhengzhou Co.,Ltd. in Q4 is related to increased impairment provisions and directly exposes dual pressures on both the revenue and cost sides, significantly undermining the quality of the full-year profit recovery.
Simultaneously, Bank Of Zhengzhou Co.,Ltd.'s net interest income accounted for a very high proportion of total revenue at 84.08% last year, while net fee and commission income accounted for only 3.46%, an extremely low level among listed city commercial banks. This unbalanced state of heavy reliance on traditional net interest margins and weak intermediary business further weakens the bank's risk resilience. Moreover, in an environment of steadily advancing interest rate liberalization, the bank's excessive dependence on the traditional model of profiting from interest spreads will continue to squeeze its profit margins.
Governance Level Turbulence If profit quality is considered a "physical ailment" for Bank Of Zhengzhou Co.,Ltd., then the severe instability within its management layer represents a "central nervous system risk" affecting the bank's long-term development.
In January 2025, on the same day President Li Hong's appointment qualification was approved, Vice President Fu Chunqiao and Assistant President Li Hong resigned simultaneously. In February, Assistant President Liu Jiuqing resigned. In March, Vice Presidents Guo Zhibin and Sun Haigang, along with Assistant President Li Lei, left their positions successively. Within just one year, multiple core senior executives, including the President, Vice Presidents, and Assistant Presidents, resigned consecutively, affecting critical lines of business such as operations, risk control, and administration.
Entering 2026, President Li Hong, who had just completed one year in the role, formally resigned. As a senior executive with extensive banking management experience, Li Hong's departure during a period of performance recovery has intensified market speculation about Bank Of Zhengzhou Co.,Ltd..
As of now, vacancies still exist within the senior management team of Bank Of Zhengzhou Co.,Ltd.. The insufficient staffing in core management positions undoubtedly adds extra operational pressure for a city commercial bank at a critical stage of transformation.
Furthermore, the bank's shortcomings in capital adequacy levels, shareholder returns, and capital market performance have yet to be addressed.
At the end of the reporting period, Bank Of Zhengzhou Co.,Ltd.'s core tier 1 capital adequacy ratio was 8.45%, and its total capital adequacy ratio was 11.71%. While these figures meet regulatory requirements, the risk buffer space is relatively small. Particularly against the backdrop of the bank's continuous asset expansion, which consumes capital, the pressure for capital replenishment will gradually become apparent. This may lead to subsequent refinancing needs, potentially diluting shareholder returns.
The level of shareholder returns from Bank Of Zhengzhou Co.,Ltd. ranks among the lowest listed banks. After suspending dividends for several consecutive years starting from 2020, dividends resumed in 2024 but at a ratio of only 9.69%, far below the industry average. In 2025, the bank continued its strategy of "no dividends, no bonus shares, no capitalizing reserves," opting to retain profits to consolidate capital and enhance risk resistance. As of the end of March 2026, the A-share price of Bank Of Zhengzhou Co.,Ltd. had long been below 2 yuan, making it the only stock among the 42 A-share listed banks with a price跌破 2 yuan. Its H-share price-to-book ratio has lingered stagnant, and its valuation remains persistently at the bottom. This negative market feedback reflects investors' long-standing concerns regarding the bank's growth quality, governance stability, and shareholder returns.
Although Bank Of Zhengzhou Co.,Ltd. achieved several breakthroughs during the reporting period, it faces multiple challenges, including a weak underlying structure, insufficient growth quality, and risks that still need containment. Rapid scale expansion has simultaneously masked the contradiction of inadequate revenue-generating capability, and management instability has introduced uncertainty into its long-term development.
In an environment characterized by stock competition within the industry, pressure on net interest margins, and increasingly stringent risk control, achieving a synergistic balance among scale, efficiency, quality, governance, and returns is a challenge that Bank Of Zhengzhou Co.,Ltd. must confront directly. Moving from a superficial recovery on the books to a high-quality rebound represents the real test for the bank, which has only just begun.
Comments